Huobi Futures offers suite of crypto derivatives products to ride the bear market

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The price of the world’s largest cryp­tocur­ren­cy, Bit­coin, has plum­met­ed to below US$18,000 this month to test its low­est lev­el in two years. Despite hav­ing rebound­ed slight­ly to around US$21,000 in the last few days, this fig­ure is a far cry from the peak of US$69,000 observed in Novem­ber last year.

Accord­ing to Coin­Mar­ket­Cap data, on June 20, the over­all mar­ket val­ue of glob­al cryp­tocur­ren­cies fell from US$2.97 tril­lion at its high­est to around US$845 bil­lion —  in oth­er words, some US$2.1 tril­lion was lost. For per­spec­tive, this is approx­i­mate­ly Apple’s total mar­ket value. 

Does the fall in the price of BTC present a rare oppor­tu­ni­ty for bar­gain hunters? Some ana­lysts believe that the price of Bit­coin may fall by more than 80% from its all-time high based on the events observed in pre­vi­ous bear mar­kets, indi­cat­ing an even­tu­al price as low as  US$13,800.

Indeed, there were increas­ing calls by traders to  “go short” after the price of Bit­coin fell from US$40,000 to US$30,000. A bear mar­ket, how­ev­er, does not guar­an­tee healthy trad­ing prof­its even if going short. On the con­trary, volatile mar­ket con­di­tions mean traders can hit rock bot­tom if due cau­tion is not exer­cised. What then, are the com­mon pit­falls to avoid when trad­ing deriv­a­tives dur­ing a bear market? 

  • Open an appro­pri­ate position

For novices who have no expe­ri­ence with deriv­a­tives trad­ing, it is not rec­om­mend­ed to open with a heavy posi­tion com­pris­ing your entire net worth. Deriv­a­tives trad­ing car­ries a much high­er risk than that of spot trad­ing, and open­ing a large posi­tion ampli­fies risk. Doing so would be tan­ta­mount to walk­ing around the fire with a full gas tank. Severe destruc­tion could hap­pen, and it could hap­pen fast.

High­er lever­age means you can invest less for a high return. How­ev­er, the risk is mag­ni­fied at the same time. Should your price pre­dic­tion go the wrong way, the loss that comes along will also be lever­aged. Begin­ners who are new to the mar­ket should not be over­ly greedy – low lever­age is the way to go.

  • Preprare suf­fi­cient margin 

Users who pre­fer coin-mar­gin­ed futures or swaps trad­ing should choose a con­tract whose under­ly­ing asset they have the abil­i­ty to increase if nec­es­sary. Inabil­i­ty to add to mar­gin means one could help­less­ly watch while posi­tions are being liq­ui­dat­ed. Should the price of the asset increase con­stant­ly under a short posi­tion, the mar­gin will need to be sup­ple­ment­ed, which equates to a high­er cost for the trader.

  • Choose a reli­able futures exchange

In a bear mar­ket, choos­ing a reli­able futures exchange indi­cates you should nev­er wor­ry about asset secu­ri­ty and sys­tem oper­a­tions.  A sta­ble exchange will also pro­tect you from unnec­es­sary liq­ui­da­tions dur­ing an extreme­ly volatile mar­ket. In addi­tion to advanced risk-con­trol sys­tems, they usu­al­ly fea­ture advanced pro­fes­sion­al func­tions, enabling users to cap­i­tal­ize on price volatil­i­ty even dur­ing a bear market. 

Why Huo­bi Futures? 

Future, Swaps and Options to choose from

Huo­bi Futures pro­vides a suite of cryp­to deriv­a­tives prod­ucts, includ­ing USDT-mar­gin­ed futures, coin-mar­gin­ed futures, USDT-mar­gin­ed swaps, and coin-mar­gin­ed swaps. Futures con­tracts have a deliv­ery date while swaps con­tracts do not. USDT-mar­gin­ed con­tracts uses the sta­ble­coin USDT as the mar­gin while coin-mar­gin­ed con­tracts use coins as the mar­gin. Both have their advan­tages — users can choose either of them based on their preferences. 

The plat­form also rebrand­ed its deriv­a­tives war­rant as Huo­bi Options ear­li­er this year,  offer­ing traders addi­tion­al hedg­ing and arbi­trage oppor­tu­ni­ties. Huo­bi Options traders can buy or sell an asset at a pre­de­ter­mined price, either before or on a spec­i­fied date. 

All of the above con­tracts enable users to spec­u­late on future price move­ments of an under­ly­ing asset for income at a much low­er cost than the asset itself, or hedge the risk expo­sure of their exist­ing positions.

The plat­form has list­ed more than 110 assets for these con­tracts, cov­er­ing DeFi, Game­Fi, NFT, stor­age, and more.

Safe and smooth sys­tem to cope with extreme cases

The Huo­bi Futures sys­tem has now been upgrad­ed to V7.0.6, and the response speed for plac­ing orders has been dou­bled, great­ly increas­ing the effi­cien­cy of the sys­tem to cope espe­cial­ly with ever-chang­ing mar­ket con­di­tions. Huo­bi attach­es high impor­tance to users’ asset secu­ri­ty. For exam­ple, the platofm pro­tects users’ assets through mul­ti­ple meth­ods such as hot and cold wal­let sep­a­ra­tion, mul­ti-sig­na­ture, pro­fes­sion­al dis­trib­uted archi­tec­ture, and anti-DDOS attack system. 

Three-phase liq­ui­da­tion system

The major­i­ty of Huo­bi Future’s man­age­ment and staff come from lead­ing invest­ment banks and have exten­sive expe­ri­ence with deriv­a­tives prod­ucts. In the sec­ond year of its estab­lish­ment, the plat­form intro­duced the three-phase liq­ui­da­tion pro­tec­tion mech­a­nism, help­ing users avoid sud­den, forced liquidations:

  1. When liq­ui­da­tion  is about to be trig­gered, the sys­tem will can­cel all open orders of the asset first;
  2. If the mar­gin ratio is still ≤0, the long and short posi­tions of the same con­tracts will be filled in with each other;
  3. If the mar­gin ratio is still ≤0, the liq­ui­da­tion will be trig­gered and the sys­tem will decrease the posi­tion to a cer­tain extent;
  4. Unlike oth­er plat­forms that charge extra fees when liq­ui­da­tion is trig­gered, Huo­bi Futures charges zero liq­ui­da­tion fees.

In addi­tion, the plat­form uses the mov­ing aver­age of the EMA index as one of the ele­ments to deter­mine liq­ui­da­tion ref­er­ence price dur­ing liq­ui­da­tion. When both the mov­ing aver­age of the EMA index and the mar­gin rate cal­cu­lat­ed from the lat­est price are less than or equal to zero, the user’s posi­tion will be liq­ui­dat­ed. This can help avoid liq­ui­da­tion caused by abnor­mal prices and the sub­se­quent liq­ui­da­tions that may be triggered.

Zero claw­back since launch

Huo­bi Futures promis­es that the claw­back will not be trig­gered when the insur­ance fund is pos­i­tive. All con­tracts under Huo­bi Futures have main­tained a record of zero claw­back since its launch in 2018. 

Pro­fes­sion­al features

For vet­er­an traders, pro­fes­sion­al trad­ing fea­tures not only save time but allow traders to do more with less. Huo­bi Futures has intro­duced a series of fea­tures such as grid trad­ing, trail­ing stop, “fol­low a mak­er” and “tak­er”; these enable users to exe­cute more advanced strate­gies while sav­ing time and effort.

Bot­tom Line

Bull mar­kets do not hap­pen overnight, nor do bear mar­kets — rebounds will occur con­stant­ly. While cur­rent inter­nal and exter­nal envi­ron­ments are not able to save cryp­to with­in a short time frame, we can still hold con­fi­dence in the long-term future of the cryp­to market. 

Be it tech­nol­o­gy, appli­ca­tions, or tal­ents, the cryp­to indus­try is bur­geon­ing with tal­ent and poten­tial­ly more than ever before. The cur­rent bear mar­ket not only serves as a test­bed for bud­ding cryp­to projects but also serves as a good oppor­tu­ni­ty for prac­ti­tion­ers to think and learn. Oppor­tu­ni­ties and returns will reward those who fol­low the cycle,  trade ratio­nal­ly, and per­sis­tent­ly learn in this gloomy environment.

Dis­claimer: This is a paid post and should not be treat­ed as news/advice.

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